Tory senator says time is right for ‘minister for poverty reduction’

OTTAWA — Conservative Sen. Hugh Segal did something this week that would be expected of a member of the government: He praised the federal budget during debate on the document tabled in March.

Then he did something a little unexpected: He said that the budget was only a start and that the government should do more to tackle poverty, specifically create a new ministerial portfolio dedicated to reducing poverty in Canada, and a new tax credit for those whose income was below the poverty line.

“Not having a section on poverty reduction in any federal or provincial budget is like having a business that leaves the door open to the safe, not to mention turning one’s eyes away from our most challenging problem,” Segal told the Senate Tuesday. “Ignoring the elephant in the room does not make the elephant disappear.”

Here’s how Segal’s tax credit scheme would work: Canadians whose incomes fell below the poverty line in their province would be able to apply for a refundable “anti-poverty tax credit.” That credit would top up income similar to the GST tax credit or income supplements for seniors. The scheme, he argued, wouldn’t require any new bureaucracy or overhead, but would also change who was eligible for welfare.

“There would be no new bureaucracy, no new overhead and, as every (tax credit) recipient would be ineligible for welfare after they were topped up in their province, provinces would save billions,” Segal argued. “Ottawa could, over time, reduce that part of the social transfer supporting welfare to the provinces based on the number of people who are being topped up through the federal tax system.”

The small-c Conservative — or the big-t Tory — argued that making some of these changes to the tax code would “begin the eradication of poverty,” and prod more low-income people to seek work.

“All the horrific disincentives to work imposed on low-income Canadians by the micromanaging, rules-based, nanny-state welfare systems of the provinces would be gone,” Segal said.

“A permanent economic under class, denied access to the economic mainstream or, because of disability, unable to participate fully, is not in any society’s interest. The cost of poverty deeply overwhelms the cost of eradicating poverty. The cost of poverty in lives and opportunities wasted or lost is simply criminal.”

Talking about poverty reduction is not unusual for Segal. His personal background includes years of living near the poverty line in Montreal as a child — a story he regularly tells. He said that while he supports the budget, he was disappointed there was no section about poverty or how to reduce it.

The full text of his speech is below. Do you agree? Disagree? Vote in the poll at the end of the speech, or post a comment below.

Honourable senators, in rising to speak to Senator Carignan’s constructive inquiry on the budget, I want to indicate that, in my view, the 2013 Economic Action Plan, while
not perfect, is a balanced, creative and measured approach to the mix of economic opportunities and risks that Canada faces. It has my support and I commend it to all members of this chamber for their careful and positive consideration when the ways and means motions are presented to us.
The budget speaks of a range of activities aimed at low-income Canadians, such as renewed federal support for affordable housing, tax credits for various circumstances, reducing taxes on lower-income members of the workforce and a particularly constructive focus on job creation and training for low-income young people found on our First Nations reserves. There are also initiatives aimed at seniors that are progressive and constructive, as are the measures aimed at the disabled.
While there are a myriad of budget sections on innovation, building Canadian infrastructure, the financial services sector, medical research and government management, and much constructive good news about programs, engagements and commitments going forward, there is no specific section on the issue and challenge of poverty. I regret this very much.
Why? Well, until we look at all the pieces relating to poverty, and the federal-provincial effort on income security for low- income Canadians writ large, unless we assemble the different lines of spending and programming in one place, then it is hard to get a precise feel for how well we are doing, at what cost and with what outcome.
Honourable senators, there is a tendency when talking about public sector spending to reflect on input costs, program design and federal-provincial agreements. This, of course, has little, if anything, to do with results — real results in the day-to-day lives of the 10 per cent of Canadians who live beneath the poverty line.
As HRSDC focuses on Employment Insurance, program design, skills development and the rest, it is not surprising, however disappointing, that the department has no explicit focus on poverty reduction. With the breakup of the old health and welfare department some decades ago, we have lost the core focus on poverty reduction that should really come first in our social, economic and fiscal policy priorities. Why? Poverty, aside from being avoidable and inhumane, is very expensive.
Honourable senators, it is poverty that is the most reliable predictor of poor education outcomes, early dropouts, poor literacy, substance abuse, family breakup, family violence, poor health outcomes, poor and expensive interactions with the law, incarceration, longer stays in hospital and earlier death. All of these cost taxpayers, our economy, our productivity and federal and provincial treasuries tens of billions of dollars every year — money that could be better directed elsewhere.
Not having a section on poverty reduction in any federal or provincial budget is like having a business that leaves the door open to the safe, not to mention turning one’s eyes away from our most challenging problem. Ignoring the elephant in the room does not make the elephant disappear.
I give Minister Flaherty full credit for what he has done for the disabled, for low-income members of the workforce, seniors, caregivers and scientific research. None of it is enough, but it is all a step in the right direction. However, the time to move on a coherent, flexible tax-based and determined reduction of poverty, has come.
Honourable senators, I hope this government will, in its coming shuffle, create a minister of state for poverty reduction. As this is a government that has come under criticism — some fair, some unfair — for doing too much through tax credits, I would like to suggest a new tax credit for the government’s consideration.
The refundable anti-poverty tax credit could operate very simply indeed. Canadians would fill out their federal tax forms annually, as they always do. If their income fell beneath the poverty line in their province, they would be automatically topped up in the same way the GST tax credit operates now or the seniors’ income supplement has operated for decades. There would be no new bureaucracy, no new overhead and, as every RAPTC recipient would be ineligible for welfare after they were topped up in their province, provinces would save billions. Ottawa could, over time, reduce that part of the social transfer supporting welfare to the provinces based on the number of people who are being topped up through the federal tax system.
The provinces could redirect their own account welfare dollars to education, seniors, modernizing our health or preventive health establishment, chronic care, or economic expansion — whatever they chose. The federal tax system would begin the eradication of poverty among something more than the seniors population alone. All the horrific disincentives to work imposed on low- income Canadians by the micromanaging, rules-based, nanny- state welfare systems of the provinces would be gone.
Reducing the tax rates on the first $5,000 of marketplace earning by recipients would be a huge incentive to work. As honourable senators will know, the vast majority of Canadians living in poverty now are working, which is why the WITB program announced by Mr. Flaherty in his first budget was such an important initiative.
Honourable senators, a permanent economic under class, denied access to the economic mainstream or, because of disability, unable to participate fully, is not in any society’s interest. The cost of poverty deeply overwhelms the cost of eradicating poverty. The cost of poverty in lives and opportunities wasted or lost is simply criminal.
As a conservative, I do not believe in legislating social or economic outcomes. I leave that to my friends on the left and the far left. However, I do believe in equality of opportunity, to be promoted by all parts of society, whenever possible, in the private sector, public sector and not-for-profit sector.
That is how we built this country. It is why millions have come to our shores for centuries and are still eager to come. We must not let complacency or myopia dilute our commitment to that equality of opportunity. We must not let federal-provincial complexity bar the path to social and economic progress.
We must not let pettifogging bureaucrats, who are risk-averse at all costs and who inhabit all of our finance departments across Canada, use their delete buttons to dull the Canadian dream.
That dream is about many things — freedom, gender equity, hockey, education, First Nations, democracy, pluralism, the vast North, the magnificence of our geography, our remarkable men and women in uniform — but it is, at its core, about opportunity. Deny opportunity to a generation, to a new generation of immigrants or to our First Nations, and we are admitting to a strong and compelling deficiency in the fabric of Canada.
This also requires some courage on the part of our governments. Federal and provincial governments that go back and forth in the same welfare rut, digging themselves further away from the sun, from the light and from reality, are truly path- dependent in a way that is wasteful and fiscally less than rational. It is time to start a new path, to plow a new furrow. I urge that further courage upon our government, upon our distinguished and accomplished Minister of Finance, and upon his colleagues in other governments nationwide. I support this budget for the good things that it does in a measured and responsible way. I urge him and his cabinet colleagues to make poverty reduction a priority as the deficit dims and our real opportunities begin. It is the very least we owe our fellow citizens, who did not choose poverty and who, like all of us, deserve a chance to build their lives with hope and engagement and who, when doing so, make the nation, its economy and our collective prospects remarkably stronger.